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Writer's pictureOgilvy Namibia

Partnership in Loyalty, a delicate dance

Rope indicating the strength of partnerships

 "WE'RE SEEING A GROWING TREND OF BRANDS FORMING STRATEGIC PARTNERSHIPS TO AMPLIFY THEIR REACH AND INCREASE VISIBILITY." 

Krinio Christaras of Mondelez International  

 

Brands are recognizing a growing trend in the loyalty landscape:  they don't have to go it alone. A strategic use of partnerships can help amplify reach, enhance value, and create more engaging experiences for customers. When executed effectively, partnerships can be a powerful force multiplier for loyalty programs.

They offer a range of potential benefits, including;


ACCESS TO NEW CUSTOMER SEGMENTS

Partnering with brands that target complementary audiences allows you to tap into new customer pools and expand your reach beyond your existing base.

 

ENHANCED VALUE PROPOSITION

Partnerships can provide access to a broader range of rewards, experiences, and benefits, making your program more appealing and valuable to customers.

 

INCREASED ENGAGEMENT AND FREQUENCY

Offering more opportunities to earn and redeem points across a wider network of partners can drive higher engagement and program usage.

 

SHARED MARKETING COSTS AND RESOURCES

Partnerships can allow you to pool resources and share marketing costs, maximising efficiency and impact.

 

For a prime example of a successful  multi-category program that effectively leverages partnerships, let's look at Virgin Red. By connecting various Virgin brands and partnering with external companies like Tesco, Chase, and Citibank, Virgin Red offers a diverse range of rewards and experiences, allowing customers to earn and redeem points within a broader ecosystem.

 

“However, partnerships inherently carry certain risks, which we are carefully evaluating as part of our strategic considerations,” cautions Christaras, highlighting the need for careful consideration and strategic alignment. Misaligned partnerships can result in:

 

BRAND DILUTION:

Partnering with brands that don't align with your values or target audience can confuse customers and dilute your brand message.

 

CUSTOMER CONFUSION:

Poorly integrated partnerships can create a fragmented customer experience, making it difficult for customers to understand how to engage across different partners, ultimately leading to frustration and disengagement.

 

OPERATIONAL COMPLEXITY:

Managing multiple partnerships can add significant complexity, requiring careful coordination, communication, and potentially costly technological integrations.

 

To navigate the partnership landscape effectively and maximise the potential while mitigating risks, brands need to adopt a strategic approach.

Partnerships in Brands

“A STAND-ALONE LOYALTY PROGRAM IS NOT ENOUGH, IT NEEDS TO BE 'FED' WITH DIFFERENT ACQUISITION/RETENTION TOOLS LIKE CRM PROGRAMS, SUBSCRIPTION OR EXCLUSIVE SERVICES.” Joël Muller at Nestlé, Global


 While nearly three-quarters of interviewees (74%) recognize the potential of partnerships to boost loyalty programs, they caution that strategic planning and seamless integration are essential to avoid pitfalls.


EMEA LOYALTY LEADERS RESEARCH INSIGHT

 

  • Define clear objectives: Before approaching potential partners, clearly define what you hope to achieve through the partnership. Is it increased reach, an enhanced value proposition, access to new customer segments, or a combination of these factors? Clearly defined objectives will guide your partner selection process and ensure alignment from the outset.

  • Choose partners that align with your brand: Look for partners that share your brand values, target a complementary audience, and offer products or services that enhance your brand experience. The partnership should feel natural and beneficial to both brands and, most importantly, the customer.

  • Seamlessly integrate partners into your program: Ensure a smooth and consistent customer experience across all partners. Clearly communicate how to engage and strive to make the integration seamless to avoid customer confusion and frustration.

  • Continuously monitor and evaluate performance: Regularly track key metrics to assess the effectiveness of your partnerships. Are they driving the desired results? Are customers engaging with the partner offerings? Be prepared to adjust, re-negotiate terms, or even dissolve partnerships that aren't delivering the expected value.


Loyalty program partnerships are a delicate dance, requiring careful planning, execution, and ongoing management. By prioritising strategic alignment, clear communication, and a customer-centric approach, brands can harness the power of the collective to create enriching and engaging loyalty experiences.


LOYALTY IN THE AGE OF THE EMOTIONAL CONSUMER – Ogilvy One (part of a series)

  

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